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Brazil: Environmental Authority Act

Since 1988, the Brazilian Federal Constitution has established that a Lei Complementar (specific class of law demanding a qualified quorum for approval in Congress) would set the rules for cooperation between the Federal Government, Brazilian States, the Federal District and Municipalities in relation to the exercise of their joint administrative authority, as provided for in Article 23 of the Brazilian Federal Constitution. This includes authority for environmental protection. After more than 20 years, on December 9, 2011, Lei Complementar No. 140 (Environmental Authority Act - EAA) was finally enacted, regulating the exercise of joint administrative authority in connection with protection of natural landscapes, environmental protection, pollution control and fauna and flora preservation.

The EAA’s major contribution was to determine, as required by the Brazilian Federal Constitution, the environmental administrative actions within the authority of each of the Federal Government, Brazilian States, the Federal District and Municipalities. Amongst the cooperation rules, the most relevant are those establishing the criteria to determine the appropriate environmental agency responsible for environmental permitting and control and inspection activities.

With regard to the definition of authority for environmental permitting, the EAA consolidated some guidelines already established under CONAMA Resolution No. 237/97, particularly the rule providing that environmental permitting should be conducted by a single entity within the federation. Also, the Federal Government is still responsible for issuing environmental permits for projects located or developed both in Brazil and in a bordering country, projects developed or located within the territorial sea, continental shelf or exclusive economic zone, and projects located or developed in indigenous areas. Conversely, projects that have (or are likely to have) local impact are, as a general rule, required to be licensed by Municipalities. The States are left with residual authority to license activities that are not assigned to the Federal Government or Municipalities.

In relation to the authority for control and inspection activities, the EAA has also provided that such authority is primarily assigned to the agency responsible for environmental permitting. Therefore, the agencies performing control and inspection activities will be in charge of issuing infraction notices and conducting the respective administrative proceedings. It is important to clarify however that such provisions do not prevent the exercise of joint authority, since the EAA simply provides that action by the agency in charge of environmental permitting prevails.

Finally, several institutional cooperation instruments have been contemplated by the EAA, such as public consortia, public agreements, technical cooperation agreements and Commissions at the National and State and Federal District levels to promote shared and decentralized environmental management.

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Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.

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